India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector, says the Economy Survey 2019

The Economic Survey 2019 has predicted 7 per cent GDP growth in Financial Year 2019-20 on stable macroeconomic conditions. They survey says India's annual economic growth could grow to 7 per cent in the financial year 2019-20, up from 6.8 per cent last year. "The nation has maintained its macroeconomic stability by containing inflation within 4 per cent and by managing a current account deficit to GDP ratio," said the economic survey, adding that growth in investment, which had slowed downfor many years, has bottomed out and had started to recover since 2017-18. Experts say if India is able to retain 7 per cent GDP growth in FY20, it will regain the status of the world's fastest-growing major economy by overtaking China.

If we look at GDP numbers in the previous five years, the economy has seen a significant decline in the growth rate. When the Modi government took over in FY15, the country was growing at 7.4 per cent. The first two years of Modi 1.0, the government pushed the economy to 8 per cent in 2015-16 and 8.17 per cent in 2016-17. There was a major decline in the growth in FY 18 at 7.17 per cent owing to the key measures, including demonetisation, taken by the Modi government in the fiscal year. The last year of the Modi government saw the biggest decline in GDP numbers during its tenure when the economy was pushed down to 6.81 per cent.

Last month, a G20 surveillance note prepared by the International Monetary Fund (IMF) staff had also said that the Indian economy was expected to grow 7.3 per cent in 2019 and 7.5 per cent in 2020. The note comes ahead of the G20 finance minister and central bank governors' meetings on June 8-9. However, it doesn't necessarily reflect the position and views of the IMF Executive Board.